Advantage COUPON Strategies:
 
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Theory of Advantage Programs:

•	Advantage Coupons Origination: 

Advantage Coupons provide linkage between sales items to give discounts based on the combined buying.  An example would be buy a cake and get ice cream at a discount.  This linked buying gives capability to form useful strategies.  Each of the advantage basic discount formula are applicable to the Advantage Coupons.  The elements of the strategies are defined below.

•	Why Monitor customer loyalty and buying frequency: 

Business establishments rely on repeat customers.  A sense of fairness, quality, and preference heighten a patron’s comfort with a business.  The Advantage system is designed to help differentiate one business from its competitors.  Strategies in the ‘Advantage’ system can take many forms but in general reward the customer for frequent buying of specific products.  The ‘Advantage’ system augments other promotion utilities such as coupons, senior discounts, mix/match discounts, ‘Rewards’ discounts (mixed strategies such as buy 5 get 1 free) based on member buying, employee discounts, and so on.

•	Definitions of Strategies:

Minimum Purchase:
With the ‘Minimum Purchase’ deal, accumulative buying of all products is linked to a price change on a ‘Target’ product.  The accumulative sale amount usually does not exclude other discounted items, but rather takes the total amount of the sale (order) and this amount trips the ‘Minimum Purchase’ strategy.
 
An example would be to offer a turkey for $5.00 (‘DEAL-AMOUNT’) if the customer purchased $50.00 (‘Sale Amount’) of product.  If the retail price of the turkey was $11.50, the discounted price would be $5.00, giving the customer a $6.50 discount on the turkey.
Cents Off:
If the ‘Advantage Coupon Flag’ is set on a bar coded item, dollars and units are accumulated for each of the items in the strategy mix.  In the ‘Cents Off’ strategy, if the accumulative buy of all items exceeds or equals the minimum deal requirement, then one (the ‘Target’) item in this deal is given a discount of the ‘DEAL-AMOUNT’.  If the deal is met multiple times in the purchase, additional discounts are given up to the maximum limit.  ‘Cents Off’ DISCOUNT the retail price, what ever it is.

An example would be to set buy 5 loafs of bread and get $.50 off the 5 loaf with a maximum of 4 discounts.  This strategy would have the minimum set to 5, the maximum to 4, and the deal amount to 50 (ex, $.50).  If the customer had bought 11 loafs of bread, they would receive $.50 times 2, or $1.00 off their buy.

½ Price Sale:
The ‘½ Price’ strategy give an item a [fraction off] of the retail price.  When the deal is configured, the [2] in the ½ becomes a devisor.  If the ‘Deal’ was set to [3], the result would be 1/3 off the target item.

An example would be to set buy [1] loaf of bread and get a 1/3 discount.  The max could be [5], the min [1], the deal [3], and the ‘Target’ and the first UPC1 would be the same code.  If the customer bought [7] loafs and the retail price was $1.00, the discount would be 5*1.00*1/3 or $1.67.  In this example the additional 2 items beyond the 5 max would not receive additional discounts.  The computation is designed to always show a DISCOUNT OFF retail.  The customer receipt would show the retail price and then the discount.

BuyMore/GetMore:
This strategy CHANGES the PRICE of the ‘Target’ item when the deal is satisfied.  
 
An example would be if bread was $1.00 each and the strategy porice was &.50.  If the max was set to 10, the min to 3, the deal to 50 and the customer bought 7 loafs, the discount would be 4*50 or $2.00.  In this case [4] items exceeded the [3] minimum and all [4] were less than the [10] limit.

1 Cent Sale:
This strategy CHANGES the PRICE of the ‘Target’ item when the deal is satisfied.  
 
An example would be if sandwich for $1.00 and get potato chips free.  In this case the potato chips are the ‘Target’.  The sandwich has the coupon flag set for this deal but limits as set on the sandwich.  The ‘Deal’ in this example would be 0, meaning FREE.  If the chips were priced at $.50, the discount would be $.50.

% Off  Sale:
This strategy computes a percentage (%) of the retail PRICE and does not change the price. 

An example would be to buy 4 cans of corn and receive 20% all cans, where the retail price is $1.00 each.  If the max was 10, the min 3, the deal 20, and ‘Target’ and the first UPC1 the same as the target, the discount would be 4*1.00*.20 or $.80.  This strategy computation is based on the current price of the item, that can chage from location to location.

CAUTION and Reminders Regarding Advantage Coupons: 

Many of the strategies are similar and achieve the similar results depending on their use.  Remember that any one strategy can be used on many items at the same time.    The name of the strategy can then become relevant to the customer and the advertising projection.  

Each strategy is given an ID number and this is associated to the product being sold.  The particular ID# is date stamped with a START and STOP date.  These dates control the application at the retail level.

Strategies are retained in the control files (S_Advantage.csv and S_Coupon.csv) and put in play date switching.  Maintenance of the Advantage discount system requires that these two files be moved to stores and the strategy ID# placed on the items in the current advertised sale.  

The Advantage program can require membership numbers or not.  The membership cards can be magnetic strip cards or scanned bar coded cards.